China reported on Thursday a drop in new cases of the flu-like virus, and while many investors are skeptical of China's reporting methodology, the data has helped risk appetite improve in the currency market.
The yen traded at 111.27 per dollar in Asia on Thursday, close to the lowest since May 2019. The Japanese yen traded near a nine-month low versus the dollar as risk appetite improved on expectations that China will continue to take steps to offset the economic impact of the corona-virus outbreak. Japan's currency tumbled 1.3% on Wednesday, its biggest daily decline since August, after triggering stop loss orders following the expiry of options that had kept the yen in a narrow range versus the dollar.
The Swiss franc , another safe-haven, was quoted at 0.9841 versus the dollar, close to its weakest since December.
The People's Bank of China is expected to cut its benchmark rate on Thursday, which would follow a cut the interest rate on its medium-term lending on Monday. The Chinese yuan held steady against the dollar in offshore trade before a widely expected cut in the country's benchmark loan prime rate later on Thursday. In the offshore market, the yuan was little changed at 7.01670 per dollar as traders awaited additional policy stimulus from Chinese officials.
The euro traded at $1.0800, close to its lowest since April 2017. The common currency managed to stabilize in Asian trading, but sentiment remains weak after disappointing economic data sent it crashing through closely-watched support levels.
The pound was quoted at $1.2915 before data later on Thursday that is forecast to show growth in British retail sales. Sterling fell 0.6% on Wednesday as market sentiment is caught between optimism about the economy and pessimism about Britain's talks with the European Union for a free trade deal.
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